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Capacity utilisation in manufacturing sector rises to 61%

Manufacturing sector
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Capacity utilisation in Nigeria’s manufacturing sector rose to 61 percent in the second half (H2) of 2018, from 59.24 percent in the preceding period of 2017.

This represents 1.76 percentage point increase, data from the Manufacturers Association of Nigeria (MAN) say.

“The increased capacity utilisation in the sector over the review period was due to general improvement in the macroeconomy and the sustained quietude in the forex market,” MAN says.

Nigeria exited recession in the second quarter of 2017 but the ghost of 2016 economic lull still looms large as weak naira and purchasing power persist. But the foreign exchange crisis faced by manufacturers in 2016 has eased as they can now get dollars to import inputs and packaging materials, unlike then when firms got less than 10 percent of the greenback they needed.

According to MAN, cross sectoral group analysis revealed that capacity utilisation increased in almost all the manufacturing groups.

In textile apparel & footwear group, capacity utilisation increased to 59.9 percent in the second half of 2018 as against 57.2percent recorded in the corresponding half of 2017, indicating 2.7 percentage point increase over the period.

Capacity utilisation in the group averaged 55.04 percent in 2018 as against 55.09 percent average of 2017, signifying 0.05 percentage point decline over the period.

Similarly, capacity in the packaging, pulp, paper, plastics, among two others (6Ps), edged up to 68.1 percent in the second half of 2018, representing 9.3 percentage point increase from 58.8 percent recorded in the corresponding half of 2017.

Capacity in the group averaged 62.52 percent in 2018, representing 6.5 percentage point increase when compared with 55.96 percent average of 2017.

In the period under review, capacity utilisation in food, beverage and tobacco rose to 62.9 percent, while that of wood & wood products edged up to 59.9 percent.

Moreover, capacity in chemical and pharmaceutical group was 59 percent within the period, while that of domestic/industrial plastic and rubber stood at 60.1 percent.

Also, analysis across industrial zones shows that almost all the zones improved in the second half of 2018.

In Ikeja zone, capacity utilisation increased to 67.6 percent in the period under review, representing 4.4 and 12.42 percentage points rise when compared with 63.2 percent and 55.18 percent recorded in the corresponding half of 2017 and the first half of 2018 respectively.

Capacity utilisation in zone averaged 61.39 percent in 2018 as against 59.9 percent average of 2017, indicating 1.49 percentage point increase over the period.

In Ogun zone, capacity in the second half of 2018 stood at 69.5 percent, representing 1.3 and 8.32 percentage increase from 68.7 percent and 61.18 percent recorded in the corresponding half of 2017 and the preceding half respectively.

More so, capacity utilisation in the zone averaged 62.34 percent in 2018 as against 62 percent recorded in 2017, showing 0.34 percentage point increase over the period.

In Apapa, it stood at 68 percent in the period under review, from 70.7 percent of the corresponding half of 2017, representing 2.7 percentage point decline over the period.

It, however, increased by 10.56 percentage point when compared with 57.44 percent recorded in the preceding half. Capacity utilisation averaged 67.72 percent in 2018 as against 66 percent average for 2017, indicating 1.72 percentage point increase over the period.

 

ODINAKA ANUDU

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